Game over ... Beyoncé Knowles faces lawsuit for pulling out of Starpower project. Photograph: Marc Piasecki/FilmMagic

An US video game developer is suing Beyoncé for more than $100m (£61m), claiming she "destroyed [its] business ... on a whim". Gate Five LLC alleges the singer "unscrupulously" scuppered plans for a game called Starpower: Beyoncé, forcing the company to sack 70 employees the week before Christmas.

According to a summons filed in New York on Tuesday (April), Beyoncé teamed up with Gate Five in June 2010, agreeing to license her image for a "lucrative joint venture". The company claims it invested $7m into the Starpower video game, which would have let players dance along with Beyoncé tunes such as Crazy in Love. But though Beyoncé "had already negotiated lavish compensation terms", the singer apparently changed her mind in mid-December, at a "crucial moment in the software's development". Gate Five's lawyers allege Beyoncé "made an extortionate demand for entirely new compensation terms". This drove away its financier, Beyoncé "pulled out", and the project collapsed.

It was, court papers declare, "a bad faith breach of contract so callous that, on what appeared to be a whim, she destroyed Gate Five's business and drove 70 people into unemployment". "The week of Christmas, she said that's it, I don't want to hear from you guys, go away," founder Grey Easley told New York magazine. Gate Five contends that even Beyoncé's father – at the time her manager – "renounced" her allegedly Scrooge-like behaviour.

Gate Five promises more unpleasant details are forthcoming, but "we'd much rather make a game than litigate", Easley said. Beyoncé has yet to respond to the allegations.